There are plenty of choices in the Mid Cap Growth category, but where should you start your research? Well, one fund that may not be worth investigating is Motley Fool Great America Fund . TMFGX holds a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
TMFGX is part of the Mid Cap Growth section, a segment that boasts a wide array of possible selections. While Mid Cap Growth mutual funds choose companies with a stock market valuation between $2 billion and $10 billion, stocks in these funds are also expected to show broad considerable growth opportunities for investors compared to their peers. To be considered a growth stock, companies must consistently report impressive sales and/or earnings growth.
History of Fund/Manager
Motley Fool is based in Providence, RI, and is the manager of TMFGX. Since Motley Fool Great America Fund made its debut in November of 2010, TMFGX has garnered more than $272.94 million in assets. The fund's current manager is a team of investment professionals.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 17.42%, and is in the bottom third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 15.98%, which places it in the bottom third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of TMFGX over the past three years is 21.7% compared to the category average of 18.89%. Over the past 5 years, the standard deviation of the fund is 17.98% compared to the category average of 15.43%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. TMFGX has a 5-year beta of 1.03, which means it is likely to be as volatile as the market average. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. The fund has produced a positive alpha over the past 5 years of 0.09, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, TMFGX is a no load fund. It has an expense ratio of 1.08% compared to the category average of 1.18%. Looking at the fund from a cost perspective, TMFGX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $500; each subsequent investment needs to be at least $50.
Bottom Line
Overall, Motley Fool Great America Fund ( TMFGX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.
For additional information on the Mid Cap Growth area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into TMFGX too for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
Image: Bigstock
Is Motley Fool Great America Fund (TMFGX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Mid Cap Growth category, but where should you start your research? Well, one fund that may not be worth investigating is Motley Fool Great America Fund . TMFGX holds a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
TMFGX is part of the Mid Cap Growth section, a segment that boasts a wide array of possible selections. While Mid Cap Growth mutual funds choose companies with a stock market valuation between $2 billion and $10 billion, stocks in these funds are also expected to show broad considerable growth opportunities for investors compared to their peers. To be considered a growth stock, companies must consistently report impressive sales and/or earnings growth.
History of Fund/Manager
Motley Fool is based in Providence, RI, and is the manager of TMFGX. Since Motley Fool Great America Fund made its debut in November of 2010, TMFGX has garnered more than $272.94 million in assets. The fund's current manager is a team of investment professionals.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 17.42%, and is in the bottom third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 15.98%, which places it in the bottom third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of TMFGX over the past three years is 21.7% compared to the category average of 18.89%. Over the past 5 years, the standard deviation of the fund is 17.98% compared to the category average of 15.43%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. TMFGX has a 5-year beta of 1.03, which means it is likely to be as volatile as the market average. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. The fund has produced a positive alpha over the past 5 years of 0.09, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, TMFGX is a no load fund. It has an expense ratio of 1.08% compared to the category average of 1.18%. Looking at the fund from a cost perspective, TMFGX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $500; each subsequent investment needs to be at least $50.
Bottom Line
Overall, Motley Fool Great America Fund ( TMFGX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.
For additional information on the Mid Cap Growth area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into TMFGX too for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.